China’s currency the yuan, has hit its highest level at the dollar after making its biggest ever daily gain. The yuan is now up by 30.4 percent against the US currency since its landmark revaluation in 2005.
That comes as Beijing warned of a trade war and said US jobs growth would suffer if the United States enacts a law – about to be voted on in the US Senate – to try to force to allow the yuan to rise.
China’s Vice Foreign Minister Cui Tiankai reiterated Beijing’s opposition to the bill and said it could hurt ties and hinder the global economic recovery. He warned that relations could also be hurt by US arms sales to Taiwan.
“(The currency bill) in no way represents the reality of the economic and trade relationship between China and the United States, and it might have an adverse impact on the development of the relations between the two countries,” Cui told reporters.
“Should the proposed legislation become law, the only result would be a trade war between China and the US and that would be a lose-lose situation for both sides,” said Cui, who currently heads the China delegation for G20 negotiations.
“If this type of situation occurs, of course it would be detrimental to the development of economic and trade relations between China and the US and detrimental to U.S. economic and job growth,” he said. “At the same time, it would hinder global economic recovery.”
China’s central bank, commerce ministry and foreign ministry last week jointly warned that enactment of the proposed currency law could lead to a trade war between the world’s two largest economies.
The White House has also recently voiced concerns that the legislation, which calls for tariffs on imports from countries with deliberately undervalued currencies, could violate international trade rules.